The southern African grocer that once dominated Zimbabwe's supermarket aisles is feeling the full weight of a continent grappling with collapsed diamond revenues, currency stress, and consumers who simply have less to spend.

Choppies Enterprises Limited, the Botswana-headquartered food retailer dual-listed on the BSE and JSE, warned on Monday that profit after tax from total operations for the six months ended 31 December 2025 would fall between 4% and 14% below the prior year, as a perfect storm of macroeconomic headwinds across its southern African footprint eroded margins even as revenues held firm.

The trading statement, released today, rounds out a dismal earnings season for Botswana-exposed businesses. Equity Axis has previously reported on how the collapse in global diamond demand has hollowed out Botswana's consumer economy, a dynamic that surfaced in Anglo American's De Beers write-downs and weighed heavily on RMB Botswana, whose parent FirstRand flagged the market in its FY2025 results. 

Choppies is now the latest and perhaps most visible casualty, given that food retail is the most direct barometer of household purchasing power.

The Gaborone-based group, which at its peak operated dozens of stores across Zimbabwe before exiting the market in 2019 amid operational and regulatory difficulties, has since rebuilt its footprint across Botswana, Namibia, Zambia, and South Africa.

But it is the Botswana home market that is doing the most damage right now. The diamond-driven slump in consumer liquidity, compounded by the Pula's devaluation and the government's austerity programme, has left shoppers buying less and trading down, crimping the high-margin lines that typically carry a grocer's profitability.

The pain is not confined to one border. In Namibia, government-subsidised commodities are compressing the pricing environment on key lines, while in Zambia, a strengthening Kwacha has pushed food prices into deflation, a dynamic that sounds benign but is deeply damaging for a retailer whose earnings are reported in Pula. The combination of currency translation losses and deflationary volume pressure in Zambia hit continuing operations particularly hard, with profit after tax from that segment expected to fall between 28% and 38%.

Yet beneath the earnings pressure, the cash story reads differently. Free cash flow is expected to surge between 118% and 128% to between BWP 116 million and BWP 121 million, up from BWP 53 million in the prior period, as capital expenditure normalises and working capital management tightens. Cash generated from operations is also expected to grow, rising between 2% and 12% to BWP 310–340 million.

The group used that liquidity firepower to retire BWP 82 million in consortium debt in January 2026, funded partly from internal cash and partly from short-term facilities, a balance sheet clean-up that removes a key refinancing overhang.

The board has committed to a dividend, though at a reduced level reflecting a 25% pay-out ratio consistent with its three-times earnings cover policy.

 New stores, the group notes, are not yet contributing at full run-rate, and the living wage implementation in Botswana which is an ethical commitment the group has maintained even through the downturn, alongside net new hiring of 626 staff, has structurally raised the cost base ahead of a revenue recovery that management characterises as cyclical rather than structural.